Board Governance Stream:

How It WorksSpeakers:

Hon. Reg AlcockExecutive in Residence, I.H. Asper School ofBusiness

Sheryl FellerBoard Chair, Red River College; Fellow CertifiedManagement Consultant, Bluebear Enterprises

Session Overview

Key issues in board governance

A brief history of government and change

Session Overview

The board landscape in Manitoba“One size does not fit all” - why imposing post-Enron private sector processes and practices on public and not for profit boards may not work so well

Session Overview continued Recognizing how governance needs to change with the growth and maturation of the organization What this means for optimizing your board’s effectiveness including practices such as recruitment and retention

Quality The Rs Continuous ChngScientific Mgmt.

Knowledge-based Economy

First Commercial use of a Computer

1951

CBC TV On Air - 1952 1957 85% coverage

Internet 1969

IBM PC1980

WWW 1994

Digital TV Sats500 stations

Cable News, Drudge

Blogs, WikisYoutube,

Facebook

Broadband

Three DeathsTime

DistanceDeference

Organizational Responses to Three Deaths Time:Speed, agility, responsiveness, Corporate reorganization,

Focus on Core LOB, Process re-engineering, Lean,6 sigma,

Distance:Globalization on Steroids, new competition, outsourcing,

supply-chain, J.I.T. new partnerships, new forms of governance,

Deference:Transparency, need to constantly prove value, PSAB,

IFRS - new forms of control/oversight, SOXs, Enhanced Role of Audit

Agencies, Boards & Commissions in

Manitoba

Crown Bus’n Ent’p

5

11,742

Crown Orgs

153

95,372

Gov’tLegisl’dRegul’d

60+

???

Gov’tFunded

?

???

Gov’tDep’ts

*

23

17,010*

Traditional View of

Government

PSAB Definition of Government (GRE)

Gov’tDep’ts

19

17,010

Crown Bus’n Ent’p

5

11,742

Crown Orgs

153

95,372

Gov’tLegisl’dRegul’d

60+

???

Gov’tFunded

?

???

Boards Boards Boards BoardsD.M.’s

InfluenceDirect

Control

AccountabilityIndirect Control

Where does your organization fit into the Manitoba landscape?

Looking beyond the simplicity of the private sector is essential

Consider the public sector and its unique characteristics

It’s Government not the Private Sector

We are not merely “customers” of government.

We are also - clients (who have complex needs)

- subjects (who have obligations)

- citizens (who have rights)

Henry Mintzberg: Professor of Management:McGill, in the Harvard Business Review.

Why do Governments Create Boards? Focus – Narrower scope – better qualitySpecialization versus equity – community empowermentValidation – community supportLeadershipOptimizing Org. Mission (replace markets) InnovationAssuming RiskStrategic Communication

In determining a governance model, consider ….

Organizational Size Matters

Complexity

Large

Micro

Medium

Small

GovernanceBoards

ManagementBoards

RegulatoryAdjudicative

Sector Matters

Private for Profit Not for Profit

Publicly Traded

Privately Held

Small

Personal

Medium

Large

Medium

Small

Micro

BusinessEnterpris

e

ServiceDelivery

PublicTrusts

Regulatory

Adjudicative Advisory

M ServiceDelivery

Public Sector

Function Matters

The Need To Evolve Think about where your organization is now - with

respect to complexity, function, depth and skills of staff.

Have you evolved?

Consider some local examples of evolution or the need to evolve – municipal councils, credit unions, WECM

The Challenge for Directors Complex Organizational StructuresWeak or non-existent market signalsMultiple Accountability RelationshipsMinister/LegislatureDepartmentCitizensProfession

Limited Time70 – 120 Hours per year

A Hierarchy of Board Activities

Oversight

Leadership

Hygiene Factors

A Model/StandardNot a GovernanceSystem

Allocating Board Time

Oversight

Leadership

Hygiene Factors

BoardGovernance

Activities

Time Allocated To Hygiene

Factors

Time AllocatedTo Leadership

Activities

Time AllocatedTo Oversight

Activities

AllocationOf

BoardTime

Leadership from the Board Holder of the Mission Planning ?? Years out Developing the Strategic Plan (with PS characteristics)

“Optimizing the mandate”Horizontally / Vertically

The Board is about: Culture, Ethics & PeopleThe Board owns Strategic CommunicationThe Board assumes Risk for the StaffThe Board helps the Minister be a champion of the organizationThe Board has a “mission”

What is your board’s mission? Imagine that your board disappeared for a year or two? Would anybody notice? Who?What would be lost?What do your answers tell you about your board’s key contributions, primary purpose?

Essentials of Effectiveness

Build the Board Mission Creating a Culture of Governance Changing tires on a moving car

Once mission is clear, consider impact of this on recruitment – do you need certain skill sets? Do you need critical connections?

Emerging recruitment practices: advertising and application processes

Strategies for involving the next generations

Essentials of Effectiveness

Moving to a new modelNew GovernanceNew LegislationNew Relationship with Government

Retention issues: We need creative ways to address them – typical challenges here include: Pluses and minuses of term limits - Do you have them?

Too short? Too long?– Compensation – Alternatives to money– Time – Provide supports to the board

Essentials of Effectiveness

Communication is criticalStrategicInternalBranding

To do’s:

• Be clear about what kind of board you are – a board is not a board is not a board

• Identify what actions you will take to strengthen your board’s leadership role and overall effectiveness

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Suggested Ways to Take the Plunge…